The USD Index, a measure of the strength of the USD against a basket of currencies, is trading back above the all-important 100 level as traders priced in bullish comment out of the Fed`s Harker who stated that a March rate hike is probably on the table provided that economic indicators maintain their current path and that the Fed should avoid allowing the curve to run away from them by not acting in a timely manner.
In commodities, gold continued to climb despite a bullish USD as we see bulls on a rampage, testing 1235, over 110 USD from the DEC 16 lows, in a show of defiance which has bears scratching their heads. Crude oil gave back some ground yesterday as bulls could not muster up the support to capture 55 and the commodity languished in the middle of its recent range.
Equities in the Us and globally were relatively flat as no major events were present to drive prices, the S&P 500 closed in the red to snap its 3-day winning streak while the Nikkei225 lost 0.5% as investors priced in a stronger JPY and its effects on the bottom line of exporting companies.
Today’s key events are expected from Canada, the USA and New Zealand. CAD traders will be on the lookout for the Canadian Ivey PMI and the Trade Balance, expected at 58.3 and 1.2B respectively with better than expected prints likely to see the CAD continue with its recent bullishness as bulls look to solidify their positions with hopes of driving any straggling bears out of the game. While a worse than expected release will see the CAD bears gain some confidence as they begin to probe lower prices. For the USD, we will be on the lookout for the Trae Balance and JOLTS Job Openings figures, expected at -45B and 5.56M respectively. USD bulls will be hoping for better than expected releases which will feed the fire of their recent resurgence, driving the USD higher. Bears on the other hand will look for worse than expected releases as they hope to retake the 100 level on the USD Index. Out of NZD we have the GDT Price Index, previously at 0.6%, and with the recent bullishness on the back of an upgraded forecast for 2yr inflation, NZD traders will be hoping for a better than expected release which will see the NZD continue on its bullish run while bears will hope for a worse than expected release as they hope to retake some of their recent losses.